Swiss member of 'Gardening Club' freight cartel fined $3.1m

Commerce Commission chairman Mark Berry investigated the cartel. Photo / Dean Purcell

Swiss air freight company Kuehne + Nagel International has been penalised $3.1 million by a High Court judge for being part of a "hard-core cartel" that used gardening codewords to try to disguise itself.

Kuehne + Nagel was the last defendant in a long-standing case brought by the Commerce Commission against six international freight forwarding companies for a range of hard core cartel behaviour.

Five other freight fowarding companies settled with the commission and paid $8.85 million in penalties but Kuehne + Nagel held out and only recently admitted liability.

At a High Court penalty hearing last Friday before Justice Geoffrey Venning, the regulator and Kuehne + Nagel had agreed the appropriate penalty for the price-fixing was $3.1 million plus costs.

This penalty was ordered yesterday by Justice Venning, which brings the total penalties for the entire case to $11.95 million.

Kuehne + Nagel admitted to being part of a secret cartel that called itself the 'Gardening Club', which put in place a price-fixing arrangement to cover costs of air security measures imposed by the British Government in 2002.

"The 'Gardening Club' was a classic hard-core cartel. Members attended covert, off-site meetings outside of business hours and used code words to describe the agreed surcharges," said Commerce Commission chairman Mark Berry.

"Our investigation uncovered emails in which 'Gardening Club' members referred to the agreed surcharges as '... the new price for asparagus for the forthcoming season' ... and 'the price of marrows'."

Berry said he was pleased this case, which began in 2007, had ended. "Businesses that act anti-competitively can expect the same determination from us."